Wetteri Plc - Interim report (Q1 and Q3)

Wetteri Plc interim report for 1 January to 31 March 2024: Favourable first quarter - strong growth in revenue

Wetteri Plc Interim report 21 May 2024 at 9.30 EET

Summary of the review period 1 January to 31 March 2024

  · The Group's revenue was EUR 144.8 million (EUR 87.8 million), 65% growth
  · Adjusted EBITDA was EUR 6.1 million (EUR 5.4 million)
  · The adjusted operating profit was EUR 2.5 million (EUR 2.6 million)
  · The operating profit was EUR 1.1 million (EUR 0.7 million)
  · The revenue of the Passenger Cars segment increased by EUR 47.3 million
(93%) year-on-year
  · The revenue of the Maintenance Services segment increased by EUR 11.0
million (76%) year-on-year
  · The car dealership business operations of Suur-Savo became part of Wetteri
through a business acquisition on 1 January 2024
  · Suvanto Trucks Oy became part of Wetteri through a share exchange on 29
February 2024

Financial guidance for 2024

  · Revenue EUR 660-800 million
  · Adjusted operating profit EUR 19-23 million

The company's medium-term (3-year) target is to achieve EUR 1,000 million in
revenue and EUR 30 million in operating profit.

Key performance indicators

EUR thousand                        1 Jan to  1 Jan to  Change   1 Jan to
                                    31 Mar    31 Mar             31 Dec
                                    2024      2023               2023
Revenue                             144,798   87,751    65%      433,849
EBITDA                              5,269     4,246     24%      19,721
EBITDA, % of revenue                4%        5%                 5%
Adjusted EBITDA 1)                  6,078     5,357     13%      23,630
Adjusted EBITDA, % of revenue       4%        6%                 5%
Operating profit (loss) (EBIT)      1,057     739       43%      4,371
Operating profit (loss), % of       1%        1%                 1%
revenue
Adjusted operating profit 1)        2,454     2,621     -6%      10,884
Adjusted operating profit, % of     2%        3%                 3%
revenue
Profit (loss) before tax            -1,560    -251      -        -4,696
Profit (loss) before tax, % of      -1%       0%                 -1%
revenue
Profit (loss) for the period from   -1,388    -362      -        -4,851
continuing operations
Profit (loss) for the period from   -1%       0%                 -1%
continuing operations, % of
revenue
Profit (loss) for the period        -1,281    35        -3,771%  -4,049

Profit (loss) for the period, % of  -1%       0%                 -1%
revenue
Earnings per share from continuing  -0.01     0.00               -0.04
operations, basic (EUR)
Earnings per share from continuing  -0.01     0.00               -0.04
operations, diluted (EUR)
Earnings per share, basic (EUR)     -0.01     0.00               -0.03
Earnings per share, diluted (EUR)   -0.01     0.00               -0.03
Return on equity (ROE), %           -14%      0%                 -13%
Return on investment (ROI), %       -9%       -2%                -9%
Equity ratio, %                     16%       18%                16%
Liquidity, %                        86%       76%                83%
Average number of personnel during  1,053     750                926
the financial year 2)
Invoiced sales of new passenger     1,070     583                3,322
cars (pcs)
Invoiced sales of new commercial    44        56                 181
trucks (pcs)
Invoiced sales of used passenger    2,443     1,220              5,764
cars (pcs)
Invoiced sales of used commercial   52        32                 114
trucks (pcs)
Orders: new passenger cars (pcs)    1,002     630                2,862
Orders: new commercial trucks       36        44                 127
(pcs)
Passenger cars: order backlog at    47,249    74,591             57,343
the end of the period
Commercial trucks: order backlog    12,071    20,100             13,655
at the end of the period
Passenger car repair shop: hours    89,050    65,393             319,562
sold
Commercial truck repair shop:       29,218    29,468             110,759
hours sold

1) The adjusted EBITDA and operating profit do not take items affecting the
comparability of the Group's EBITDA and operating profit into account, such as
significant non-recurring items of income and expenses and amortisation of the
fair value of assets recognised on the balance sheet by means of acquisition
calculations. The purpose of the adjusted EBITDA and operating profit is to
improve the comparability of the Group's EBITDA and operating profit between
periods. The reconciliation of the adjusted EBITDA and operating profit is
presented on page 15 of the interim report.

2) The calculation of the number of personnel has been revised in the review
period so that the number of personnel at the end of each month has been added
together, and the amount thus obtained has been divided by the number of months
in the review period. The comparison information has also been adjusted to
correspond to this calculation method.

Aarne Simula, CEO:

“Considering the challenges in the operating environment, the first quarter of
2024 was favourable for Wetteri. The Group's revenue was EUR 144.8 million, and
its adjusted EBITDA increased to EUR 6.1 million. Adjusted operating profit
remained at last year's level and was EUR 2.5 million. Wetteri's operational
performance during the review period was affected by the harbour strikes in
particular, which shifted deliveries of new cars from the normally busy March to
the following months. The impact of the strikes was also reflected in spare
parts logistics and, consequently, maintenance.

In Wetteri's business segments, revenue growth was highest in the Passenger Cars
segment, where revenue rose by 92% to EUR 98.5 million. The invoiced sales of
new cars increased by around 61% year-on-year, and the order backlog for new
cars at the end of the review period was EUR 47.2 million. The revenue of the
Heavy Equipment segment decreased slightly from the previous year. The invoiced
sales of new commercial trucks totalled 44, and 36 new orders were received. The
invoiced sales of used commercial trucks totalled 52.

The revenue of Maintenance Services increased by 76% and was nearly EUR 25.5
million, but investments in the development of maintenance operations affected
performance compared to previous year. In the maintenance services, the multi
-brand selection and the extensive expertise created through it is a great
strength in the era of electrified motoring, as there is a strong demand for
trained and importer-audited brand maintenance. The electrification of driving
does not reduce the need for maintenance, but the opposite: customer loyalty is
apt to create volume growth and revenue growth, and thereby support Wetteri's
growth goals also in terms of maintenance.

Wetteri is on its way to becoming the largest and most profitable player in the
automotive sector by the end of 2025. Wetteri's growth strategy is acquisition
-driven, and this strategic choice is based on a megatrend shaping the
automotive industry, driving the industry to focus on fewer larger players. The
transformation of the automotive industry is being driven by numerous smaller
changes in technology, operating models and consumer behaviour. The car trade is
a business based on volumes, and economies of scale generate synergy benefits
and give leverage to navigate the transformation of the operating environment.

Wetteri's acquisition-driven growth strategy is based on volume growth and
decreasing costs as a result of synergy benefits, as well as improved margins.
To improve the profitability of operations, Wetteri has started to eliminate
overlaps created by acquisitions by reorganising the administration and regional
business management, for example. The efficient use of facilities is being
assessed. In business acquisitions, the focus will continue to be on well
-managed companies with strong development potential, whose culture is close to
Wetteri's. This helps ensure successful integrations and the realization of
practical benefits as soon as possible.

Wetteri differs from many other operators in the automotive sector because of
its comprehensive business model and extensive offering. Wetteri's business
model covers the sale of new and used passenger and commercial vehicles, as well
as the sale of heavy vehicles. In addition, Wetteri offers a wide range of
maintenance services and repair shop services, as well as spare parts and tyre
services in all vehicle categories. Through acquisitions, Wetteri has become
stronger by means of a wider service network, new brand representation and brand
-specific expertise, for example. Wetteri's business model and Finland's largest
car brand representation are strengths that help the company navigate the
constantly challenging market situation.

This year, the number of first registrations of new passenger cars is expected
to be 76,000, still well below the long-term average. There is a strong need for
renewal in Finland's rapidly ageing car fleet: the emissions reduction targets
for transport will not be achieved with the current car fleet, and a new fleet
is also required to improve road safety. The automotive sector has pent-up
demand that will be unleashed in the near future, as well as strong potential
for organic growth. The demand for new cars is also expected to pick up in the
second half of this year. More moderate interest rate developments and the
continued tax incentive for fully electric company cars are promising signals
for growth.

In 2024, we will continue to execute our growth strategy with determination. In
early 2024, Suur-Savon Auto and Suvanto Trucks Oy became part of Wetteri.
Suvanto Trucks provided Wetteri with strong expertise in purchasing used
commercial trucks, in addition to procurement channels. We are planning to build
a nationwide sales network for used commercial trucks and make more efficient
use of our existing distribution channels. In May, we signed the first import
and distribution agreement in Wetteri's history for earth-moving machinery. In
June 2024, we will open a major used car dealership in Vantaa in line with the
Wetteri Premium concept. This will enable us to respond to the growing demand
for high-quality used cars in the Helsinki metropolitan area. During 2024, we
will also explore opportunities for funding growth, expanding the company's
ownership base and strengthening self-sufficiency through a directed share issue
for institutional investors, private investors and Wetteri's personnel.”

Estimate of developments in 2024

Challenges in the availability of new cars have mainly been resolved, and
deliveries from the order backlog, which started in 2023, will continue in 2024.
Economic uncertainty may reduce the demand for new cars in all vehicle
categories, and the number of first registrations is expected to be lower than
in 2023. The recent signals of stabilised interest rates and a change in the
direction of inflation may increase the demand for new cars in all vehicle
categories, and the used car trade is expected to continue to grow. Maintenance
operations are expected to continue at a strong level. Customer orders are
expected to increase from the previous year.

Wetteri's disclosure of financial information in 2024

28 August 2024 Interim report for January-June 2024

21 November 2024 Interim report for January-September 2024

Oulu 21 May 2024

Wetteri Plc

Board of Directors

Further information:

Aarne Simula, CEO and President, Wetteri Plc

Tel. +358 400 689 613, aarne.simula@wetteri.fi

Wetteri Plc - An Entrepreneur-Driven Automotive Growth Company

Wetteri Plc is an entrepreneur-driven growth company in the automotive industry.
In addition to the retail trade of passenger, utility and heavy-duty vehicles,
the Company provides maintenance and damage repair services from passenger cars
to heavy-duty vehicles. The Company has 49 offices in its home country,
headquartered in Oulu. The company employs around 1000 people, of whom nearly
70% work in maintenance and repair services. Wetteri promotes digitalisation in
the automotive sector and is an important player on the common journey towards
emission-free motoring.More information: sijoittajat.wetteri.fi/en/

Attachments:

Wetteri_Interim-report_January-March_2024.pdf